MAS Proposes Stablecoin License with Full Reserves Requirement
Singapore's Monetary Authority (MAS) has proposed a new stablecoin issuance license that requires licensed issuers to maintain reserves covering at least 100% of outstanding tokens. The framework, which was announced in 2023 and is now being implemented through amendments to the Payment Services Act, aims to regulate single-currency stablecoins issued in Singapore and pegged to the Singapore dollar or a Group of Ten currency.
The proposed license would prohibit issuers from paying interest or providing benefits calculated by reference to customers' stablecoin holdings. This restriction is intended to preserve the tokens' role as payment and settlement instruments rather than deposit or investment products. The MAS has also proposed banning issuer-funded interest or benefits directly tied to customer stablecoin holdings.
Foreign stablecoins could receive limited recognition if their issuing jurisdictions offer comparable regulatory safeguards, including reserve backing, supervision, redemption, and financial-crime controls. However, the MAS would need to assess each foreign regime individually before granting recognition.